Corporate Imperialism

Corporations have always been forms or aspects of governments, agents and manifestations of state power. The earliest corporate charters were given to colonial governments that often were simultaneously for-profit business ventures and were operated accordingly — typically dependent on free stolen land and resources combined with a cheap workforce of impoverished immigrants, convict labor, indentured servants, and slaves. That is the origin of modern capitalism.

By definition, a corporation is a political entity and institution, a creature of government. A corporate charter is a legal and political construction offering legal rights and privileges that are protected and enforced by official authority and, when necessary, violent force. In some cases, from the East India Company ruling India to the American Robber Barons ruling company towns, corporations have operated their own policing and employed their own goons. And as long as political reform or populist revolution doesn’t take them out of power, they eventually become fully functioning governments.

Essentially, a corporation is no different than a central bank, an alphabet soup agency, a political party, etc. In fact, many regulatory agencies are captured by and act on the behalf of corporations, not on behalf of the people or their elected representatives. Even from the beginning, it was never clear whether corporations were entities beholden to governments or a new kind of governing body and political organization. The struggle between colonial corporations and the colonial empires was often about which elite held ultimate power, only later involving local populations attempting to seize power for self-governance. The American Revolution, for example, was as much a revolt against a corporation as it was against an empire.

We are living at a time when the majority (about two third) of the largest economies in the world are transnational corporations. These new corporations are not only seizing the power of governments or otherwise pulling the strings behind the scenes: bribery, blackmail, cronyism, etc. Acting beyond the level of nation-states, they are creating something entirely new — a global network of corporate governance that lacks any and all democratic procedure, transparency, and accountability.

Once colonial imperialism asserted itself, it was inevitable what corporations would become. The early ideology of corporatism had its origins in the Catholic Church, another vast transnational institution. But now corporations serve no other master than raw power, which is to say authoritarianism — national corporatocracy growing into an even more fearsome predator, transnational inverted totalitarianism ruled by psychopaths, dominators, and narcissists.

As our new Lord and Savior Donald Trump demonstrates, a successful plutocrat and kleptocrat can declare bankruptcy numerous times over decades and still maintain his position of immense wealth while using that wealth to buy political influence and position (with decades of ties to foreign oligarchs and crime syndicates involving apparent money laundering, only now being investigated but probably with no real consequences). Before Trump, it was Ronald Reagan who went from radio sportscaster to Hollywood actor to corporate spokesperson to politician to the most powerful man in the world. But if not a cult of media personality like that surrounding Reagan or Trump, we would be instead be ruled by an internet tycoon like Jeff Bezos (with his ties to the CIA and Pentagon) or a tech tycoon like Peter Thiel (with his dreams of utopian technocracy)— the results would be similar, an ever increasing accumulation of wealth and concentration of power.

Even more concerning are the powerful interests and dark money that operate behind the scenes, the Koch brothers and Mercer families of the world, the most successful of them remaining hidden from public disclosure and news reporting. The emergent corporate imperialism isn’t limited to individuals but crony networks of establishment power, political dynasties, and vast inherited wealth; along with lobbyist organizations, think tanks, front groups, big biz media, etc.

The money men (they are mostly men and, of course, white) are the celebrities and idols of the present corporatist world in the way those in past eras admired, worshipped, and bowed down to popes, monarchs, and aristocrats. This 21st century ruling elite, including the puppet masters that keep the show going, is as untouchable as that of the ancien regime and in many ways more powerful if more covert than the East India Company, that is until a new revolutionary era comes. There isn’t much room for hope. In all of these centuries of struggle between various ruling elites, democracy for all its rhetoric remains a dream yet to be made real, a promise yet to be fulfilled.

* * *

The East India Company: The original corporate raiders
by William Dalrymple

It seemed impossible that a single London corporation, however ruthless and aggressive, could have conquered an empire that was so magnificently strong, so confident in its own strength and brilliance and effortless sense of beauty.

Historians propose many reasons: the fracturing of Mughal India into tiny, competing states; the military edge that the industrial revolution had given the European powers. But perhaps most crucial was the support that the East India Company enjoyed from the British parliament. The relationship between them grew steadily more symbiotic throughout the 18th century. Returned nabobs like Clive used their wealth to buy both MPs and parliamentary seats – the famous Rotten Boroughs. In turn, parliament backed the company with state power: the ships and soldiers that were needed when the French and British East India Companies trained their guns on each other. […]

In September, the governor of India’s central bank, Raghuram Rajan, made a speech in Mumbai expressing his anxieties about corporate money eroding the integrity of parliament: “Even as our democracy and our economy have become more vibrant,” he said, “an important issue in the recent election was whether we had substituted the crony socialism of the past with crony capitalism, where the rich and the influential are alleged to have received land, natural resources and spectrum in return for payoffs to venal politicians. By killing transparency and competition, crony capitalism is harmful to free enterprise, and economic growth. And by substituting special interests for the public interest, it is harmful to democratic expression.

His anxieties were remarkably like those expressed in Britain more than 200 years earlier, when the East India Company had become synonymous with ostentatious wealth and political corruption: “What is England now?” fumed the Whig litterateur Horace Walpole, “A sink of Indian wealth.” In 1767 the company bought off parliamentary opposition by donating £400,000 to the Crown in return for its continued right to govern Bengal. But the anger against it finally reached ignition point on 13 February 1788, at the impeachment, for looting and corruption, of Clive’s successor as governor of Bengal, Warren Hastings. It was the nearest the British ever got to putting the EIC on trial, and they did so with one of their greatest orators at the helm – Edmund Burke.

Burke, leading the prosecution, railed against the way the returned company “nabobs” (or “nobs”, both corruptions of the Urdu word “Nawab”) were buying parliamentary influence, not just by bribing MPs to vote for their interests, but by corruptly using their Indian plunder to bribe their way into parliamentary office: “To-day the Commons of Great Britain prosecutes the delinquents of India,” thundered Burke, referring to the returned nabobs. “Tomorrow these delinquents of India may be the Commons of Great Britain.”

Burke thus correctly identified what remains today one of the great anxieties of modern liberal democracies: the ability of a ruthless corporation corruptly to buy a legislature. And just as corporations now recruit retired politicians in order to exploit their establishment contacts and use their influence, so did the East India Company. So it was, for example, that Lord Cornwallis, the man who oversaw the loss of the American colonies to Washington, was recruited by the EIC to oversee its Indian territories. As one observer wrote: “Of all human conditions, perhaps the most brilliant and at the same time the most anomalous, is that of the Governor General of British India. A private English gentleman, and the servant of a joint-stock company, during the brief period of his government he is the deputed sovereign of the greatest empire in the world; the ruler of a hundred million men; while dependant kings and princes bow down to him with a deferential awe and submission. There is nothing in history analogous to this position …”

Hastings survived his impeachment, but parliament did finally remove the EIC from power following the great Indian Uprising of 1857, some 90 years after the granting of the Diwani and 60 years after Hastings’s own trial. On 10 May 1857, the EIC’s own security forces rose up against their employer and on successfully crushing the insurgency, after nine uncertain months, the company distinguished itself for a final time by hanging and murdering tens of thousands of suspected rebels in the bazaar towns that lined the Ganges – probably the most bloody episode in the entire history of British colonialism.

Enough was enough. The same parliament that had done so much to enable the EIC to rise to unprecedented power, finally gobbled up its own baby. The British state, alerted to the dangers posed by corporate greed and incompetence, successfully tamed history’s most voracious corporation. In 1859, it was again within the walls of Allahabad Fort that the governor general, Lord Canning, formally announced that the company’s Indian possessions would be nationalised and pass into the control of the British Crown. Queen Victoria, rather than the directors of the EIC would henceforth be ruler of India. […]

For the corporation – a revolutionary European invention contemporaneous with the beginnings of European colonialism, and which helped give Europe its competitive edge – has continued to thrive long after the collapse of European imperialism. When historians discuss the legacy of British colonialism in India, they usually mention democracy, the rule of law, railways, tea and cricket. Yet the idea of the joint-stock company is arguably one of Britain’s most important exports to India, and the one that has for better or worse changed South Asia as much any other European idea. Its influence certainly outweighs that of communism and Protestant Christianity, and possibly even that of democracy.

Companies and corporations now occupy the time and energy of more Indians than any institution other than the family. This should come as no surprise: as Ira Jackson, the former director of Harvard’s Centre for Business and Government, recently noted, corporations and their leaders have today “displaced politics and politicians as … the new high priests and oligarchs of our system”. Covertly, companies still govern the lives of a significant proportion of the human race.

The 300-year-old question of how to cope with the power and perils of large multinational corporations remains today without a clear answer: it is not clear how a nation state can adequately protect itself and its citizens from corporate excess. As the international subprime bubble and bank collapses of 2007-2009 have so recently demonstrated, just as corporations can shape the destiny of nations, they can also drag down their economies. In all, US and European banks lost more than $1tn on toxic assets from January 2007 to September 2009. What Burke feared the East India Company would do to England in 1772 actually happened to Iceland in 2008-11, when the systemic collapse of all three of the country’s major privately owned commercial banks brought the country to the brink of complete bankruptcy. A powerful corporation can still overwhelm or subvert a state every bit as effectively as the East India Company did in Bengal in 1765.

Corporate influence, with its fatal mix of power, money and unaccountability, is particularly potent and dangerous in frail states where corporations are insufficiently or ineffectually regulated, and where the purchasing power of a large company can outbid or overwhelm an underfunded government. This would seem to have been the case under the Congress government that ruled India until last year. Yet as we have seen in London, media organisations can still bend under the influence of corporations such as HSBC – while Sir Malcolm Rifkind’s boast about opening British embassies for the benefit of Chinese firms shows that the nexus between business and politics is as tight as it has ever been.

The East India Company no longer exists, and it has, thankfully, no exact modern equivalent. Walmart, which is the world’s largest corporation in revenue terms, does not number among its assets a fleet of nuclear submarines; neither Facebook nor Shell possesses regiments of infantry. Yet the East India Company – the first great multinational corporation, and the first to run amok – was the ultimate model for many of today’s joint-stock corporations. The most powerful among them do not need their own armies: they can rely on governments to protect their interests and bail them out. The East India Company remains history’s most terrifying warning about the potential for the abuse of corporate power – and the insidious means by which the interests of shareholders become those of the state. Three hundred and fifteen years after its founding, its story has never been more current.

 

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